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Wolfpack Gold Corp. and Timberline Resources Corporation to Merge; Wolfpack Announces Financing


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2014-03-13 13:06:48 -

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Reno, Nevada US, March 13, 2014 /FSC/ - Wolfpack Gold Corp. (WFP - TSX Venture), ("Wolfpack" or the "Company announced today it has agreed in principle to merge with Timberline Resources Corporation (NYSE MKT: TLR; TSX-V: TBR) ("Timberline") creating a Nevada focused gold exploration company with a substantial portfolio of quality assets in a world class jurisdiction.

Wolfpack and Timberline have agreed to an exclusivity period expiring April 22, 2014, during which time the parties will conduct their respective due diligence. Upon completion of satisfactory due diligence, the parties will conclude a definitive agreement. The merger is expected to be completed by a plan of

arrangement or other suitable mechanism.

With the focus on Nevada, it is currently anticipated that prior to merging, Timberline will transfer ownership of its partially permitted Butte Highlands Gold Project in Montana to its existing shareholders through a spin-out or similar transaction. Similarly, Wolfpack will transfer its ownership of its uranium assets to its shareholders prior to the merger. The exact mechanism and timing of these transfers has yet to be finalized.

"Combining gold and uranium assets within Wolfpack successfully protected our projects, with reduced overhead and operating costs, during a very difficult market. With the planned pre-merger spinoff, Wolfpack's existing shareholders will continue to benefit fully from any future developments with our uranium properties," said William M. Sheriff, Chairman of Wolfpack Gold Corp. "At the same time, this merger will see us focus on expanding the resource at South Eureka-Lookout Mountain as our lead project. We believe that a partnership with Timberline will enhance shareholder value and provide us with greater access to the United States markets."

The transaction is expected to be structured such that Timberline will acquire all of the outstanding shares of Wolfpack and on completion, former Wolfpack shareholders will hold, as a group, approximately 50% of the outstanding Timberline shares. At closing, Timberline will consolidate its shares on a ratio to be determined by the parties and reconstitute its board of directors to be comprised of an equal number of directors from each company. The agreement requires a break fee in the amount of US$500,000 be paid by a party electing to terminate the agreement to accept a third party superior proposal.

Under the terms of the letter of intent, Wolfpack has agreed to provide Timberline with a bridge loan of up to US$1,000,000 to fund the working capital needs of Timberline during the interim period prior to the completion of the proposed transaction. Timberline may draw down an initial US$500,000 and may thereafter request additional tranches of US$250,000. The loan will mature on the earlier of completion of the business combination and one year from the initial draw down under the loan. The amount drawn will bear interest at 5% during the first six months of the loan and thereafter at 10% until repaid (in each case compounded annually). In the event the proposed transaction for any reason does not complete, Wolfpack will have the exclusive right, on the maturity date, to be paid the principal amount of the loan and interest in cash or elect to receive all or a portion thereof in common shares of Timberline. Repayment will also be secured by Timberline's interest in the Seven Troughs property located in Pershing County, Nevada.

In the event Timberline decides for any reason to terminate discussions regarding the business combination prior to execution of the definitive agreement, Timberline will, in consideration for Wolfpack making the bridge loan, assign a 0.25% net smelter returns royalty in the Seven Troughs property to Wolfpack.

Completion of the proposed business combination is subject to a number of conditions, including satisfactory completion of due diligence by each of the parties, execution of a mutually acceptable definitive agreement by April 22, 2014, and receipt by both Wolfpack and Timberline of all stock exchange and third party approvals, including shareholder approval if required. Advancement of the bridge loan and any conversion thereof into Timberline shares, is subject to receipt by both parties of stock exchange approval.

CONCURRENT FINANCING

The Company also announces a non-brokered private placement of common shares to raise up to $2,200,000 at $0.10 per share. The Company anticipates completing the private placement in two approximately equal tranches: the first half promptly following receipt of regulatory approval for the financing and the balance following execution of the definitive business combination agreement. Completion of the private placement will not be subject to completion of the proposed business combination. Proceeds of the financing will be used to fund transaction costs and for general working capital purposes.

Completion of the financing on the terms described above is subject to stock exchange regulatory approval.

About Wolfpack Gold Corp.

Wolfpack Gold's mandate is to advance low cost heap leach and high grade underground gold projects towards production in the western United States. The advanced Adelaide and Castle-Black Rock projects have previous operating histories as open pit heap leach operations before closing due to low gold prices in the 1980's. With quality assets in a world class jurisdiction, a budgeted three-year plan and an exploration team with documented exploration discoveries in Nevada, Wolfpack Gold is positioned to advance new and existing discoveries towards production. In addition, the Company has a 100% interest, with no holding costs, on 115,000+ acres (46,400 ha) of private mineral rights in New Mexico, including the Crownpoint and Hosta Butte uranium deposits. These deposits contain an indicated resource of 26.6 MM pounds U3O8 at an average grade of 0.105% eU3O8 and an inferred resource of 6.1 MM pounds U3O8 at an average grade of 0.110 eU3O8 (Beahm, 2012). A portion of these resources are under NRC license.

About Timberline Resources

Timberline Resources Corporation is exploring and developing advanced-stage gold properties in the western United States. Timberline holds a 50-percent carried interest ownership stake in the Butte Highlands Joint Venture in Montana. Timberline's exploration is primarily focused on the major gold districts of Nevada, where it is advancing its flagship Lookout Mountain Project toward a production decision while exploring a pipeline of quality earlier-stage projects at its South Eureka Property and elsewhere. Timberline's leadership has a proven track record of discovering economic mineral deposits that are developed into profitable mines. Timberline is listed on the NYSE MKT where it trades under the symbol "TLR" and on the TSX Venture Exchange where it trades under the symbol "TBR".

For additional information:

Wolfpack Gold Corp.
William M. Sheriff, Chairman
(208) 635-5415
or
Nate Tewalt, Chief Executive Officer
(208) 635-5415
info@wolfpackgold.com
www.wolfpackgold.com

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The securities referenced in this news release have not been registered and may not be sold in the United States absent registration or an exemption from registration.

Cautionary Note Regarding Forward-Looking Statements

Information set forth in this news release may involve forward-looking statements under applicable securities laws. Forward-looking statements are statements that relate to future, not past, events. In this context, forward-looking statements often address expected future business and financial performance, and often contain words such as "anticipate", "believe", "plan", "estimate", "expect", and "intend", statements that an action or event "may", "might", "could", "should", or "will" be taken or occur, or other similar expressions. All statements, other than statements of historical fact, included herein including, without limitation; statements about the terms and completion of the business combination, bridge loan and related transactions are forward-looking statements. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: failure to successfully negotiate a definitive agreement satisfactory to both parties; failure to successfully complete the parties' respective due diligence review; and failure to satisfy all conditions precedent to the definitive business combination agreement, including any required shareholder approval and approval of the TSX Venture Exchange; failure to realize the anticipated benefits of the proposed transaction; and the additional risks identified in the management discussion and analysis section of Wolfpack Gold Corp.'s and Timberline Resources Corporation's interim and most recent annual financial statement or other reports and filings with the TSX Venture Exchange and applicable Canadian securities regulators. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are made and the respective companies undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by applicable securities laws. Investors are cautioned against attributing undue certainty to forward-looking statements.


To view this press release as a PDF file, click onto the following link:
www.usetdas.com/pr/WolfpackMar132014.pdf




Source: Wolfpack Gold Corp. (TSX-V: WFP ) www.wolfpackgold.com
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Author:
Fred Gautreau
e-mail
Web: www.fscwire.com
Phone: 14037173898

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